When the time comes for a new vehicle, motorists have a number of ways that they can obtain one. They could purchase the car outright, arrange a PCP or HP deal or take out a lease. These days, many motorists are taking out a lease and this can make a lot of sense when you consider the wide-ranging benefits of leasing deals compared to other options. So, what are the main benefits of leasing?
Low Monthly Costs
One of the biggest perks of leasing is that it can be cheaper than other finance deals. This is because with a lease you are only paying the difference between the purchase price and the residual value at the end of the agreement, which means that there is no interest or balloon payment.
Brand New Car Of Your Choice
Another major benefit is that you can choose a brand new car of your choice and do this again at the end of the agreement. When deciding on a new car to buy, you are planning for the long term and it is a major commitment, but with a lease, you can drive a brand new car every few years without having to worry about selling the car and depreciation (more on this to come).
Smaller Deposit
Another financial benefit of leasing over finance deals is that you can usually put down a much smaller deposit. With PCP, you often have to put down a deposit of between 10 and 20% which can be a lot of money to part with upfront. This makes leasing a sensible financial option and easier on your wallet.
Avoid Depreciation
Perhaps the biggest financial benefit of leasing is that you get to avoid depreciation. New cars lose around a third of their value after just one year and over 50% after three, so this means that you are taking an enormous financial hit if you buy the vehicle. With a lease, you can simply return the key at the end of the agreement and take out a lease on another new car.
Insurance is Usually Included
Often, you will find that the cost of insurance is bundled into the monthly payments. This gives you one less thing to worry about and can make it easier to plan your monthly budget. Additionally, you will be paying a fixed monthly amount for the lease which can make it easy to manage.
As you can see, there are many benefits to leasing and it makes a lot of sense from a financial standpoint. Leasing also allows you the thrill of driving a brand new car every few years without having to worry about selling the car and taking a hit due to depreciation.
